Introduction

The importance of predictable funding to more effective and efficient humanitarian responses, through increased use of multi-year funding arrangements, is widely acknowledged. For instance, the High-level Panel on Humanitarian Financing^[1], Good Humanitarian Donorship (GHD) Principles^[2] and the Grand Bargain^[3] all call for increased volumes of predictable humanitarian financing. A growing body of policy literature has also emerged, in particular in relation to multi-year funding, focusing on the perceived benefits of and need for predictable and flexible funding.^[4] The literature also identifies guidance on effective programming in this area.

Since the World Humanitarian Summit in 2016, the Grand Bargain process has been the central focus of efforts to increase volumes of multi-year funding. Among other commitments on multi-year planning and funding, the Grand Bargain calls for aid organisations and donors to “increase multi-year, collaborative and flexible planning and multi-year funding instruments and document the impacts on programme efficiency and effectiveness, ensuring that recipients apply the same funding arrangements with their implementing partners”.^[5] Initially, these efforts to increase multi-year funding and programming were directed through Workstream 7, which focused exclusively on increasing “collaborative multi-year planning and funding”.

In 2018 Workstream 7 was merged with Workstream 8, on reducing the “earmarking of donor contributions”, and re-named “Enhanced quality funding through reduced earmarking and multi-year planning and funding”. This acknowledges that predictable, multi-year funding and flexible, less earmarked funding are two interconnected elements of “quality funding”. Since the merging of the workstreams, the new Enhanced Quality Funding workstream has sought to accelerate progress on Grand Bargain commitments, including focusing attention on some of the key challenges identified in this report (preliminary findings for which were presented at a workshop on Workstreams 7 and 8 in September 2019).^[6]

The 2019 Grand Bargain Independent Report, based on the self-reports of signatories, notes that significant progress has been made against some elements of the commitments under the Enhanced Quality Funding workstream. However, this progress is uneven across commitments and varies, in particular, between donors and aid organisations. Specifically with regard to volumes of multi-year funding, it notes that: “The most progress has been made by the donor group: 14 out of 18 have either maintained or increased the volume or percentage of multi-year funding they make available”. However, the report also notes that this “contrasts sharply with the experience of aid organisations, the majority of which reported seeing no or only minimal increases in the multi-year funding available to them”.^[7]

The extent to which progress is being made in increasing the volume of multi-year humanitarian funding provided therefore remains unclear. Data sources – including the Grand Bargain self-reporting process, the Financial Tracking Service (FTS) of the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), the International Aid Transparency Initiative (IATA) and independent research – have yet to provide a clear picture of the quantity of multi-year funding passing through the humanitarian system. There is a significant information gap, which weakens ongoing efforts to implement the Grand Bargain commitments and hold signatories to account.

This study seeks to provide a strong baseline, informed by robust data, to begin to fill this evidence gap on multi-year humanitarian funding. The report provides a global view on trends in multi-year humanitarian funding, complementing other research conducted by Development Initiatives (DI) and the Norwegian Refugee Council in 2019, which focuses on field perspectives of multi-year funding in Jordan and Lebanon.^[8] This global study, while noting the close interconnection between predictable, multi-year funding and flexible, unearmarked funding, sought to focus only on multi-year funding, given the complexities and challenges inherent in seeking to unpack and quantify each type of funding. Data was collected, where available, on the extent of earmarking of multi-year funding, but attempts were not made to collect comprehensive data on total volumes of earmarked humanitarian funding.

The study sought to fulfil the following objectives:

• To establish initial global figures for levels of multi-year humanitarian funding
• To enhance understanding of where such funding is allocated (by organisation type and recipient destination) and, where possible, how it is disbursed at different levels within the humanitarian system (international, national and local)
• To identify issues and challenges in collating and reporting data on multi-year funding
• To feed findings into discussions on definitions, identifying data gaps and providing recommendations on how to address these gaps.

The study employed a mixed methods approach, combining quantitative and qualitative data. Primary quantitative data was collected from donor and aid organisations that are Grand Bargain signatories. Separate quantitative surveys were designed to collect structured data from donors and from aid organisations. Surveys were circulated to all Grand Bargain signatories by the Grand Bargain Secretariat in April 2019, with survey responses collated and verified between April and August.

Qualitative semi-structured interviews were conducted with Grand Bargain signatories, researchers and independent financing experts between January and April 2019, to inform the scope and focus of the survey and broader study. Additional semi-structured interviews were conducted with Grand Bargain signatories between April and September 2019, following receipt of survey responses, to deepen understanding of funding policy and practice. Survey responses were received from 11 donors and 10 aid organisations. Interviews were conducted with 18 Grand Bargain signatories. A more detailed explanation of the methodology and its limitations is presented in Appendix I.

The paper is structured around key findings from the quantitative data surveys, which illustrate trends in donor contributions – total volumes and proportions, duration of agreements, extent of earmarking and recipients – and in first-level recipients’ experience of multi-year funding. Qualitative findings from interviews accompany the quantitative findings, explaining and contextualising donor and aid organisation behaviour, and highlighting emerging issues. The study also explores additional issues relating to the reporting and tracking of multi-year humanitarian funding. It concludes with recommendations for improving analysis and understanding of multi-year humanitarian funding.